Flow of Stimulus Funds Slightly Exceeds Forecast

WASHINGTON -- Economic stimulus spending is currently "slightly ahead of estimates," with $29 billion distributed to state governments through mid-June, according to a new Government Accountability Office report.

But the report, set to be released Wednesday, isn't likely to appease critics of the government's $787 billion stimulus package, who say money isn't flowing out fast enough to ease growing unemployment, which hit a rate of 9.5% last month.

The GAO initially forecast that $49 billion would be spent by the federal government in increased transfers to state governments through fiscal 2009, which ends Sept. 30. Through June 19, 60% of that amount had been disbursed -- putting spending slightly ahead of estimates, it said.

According to the report, 90% of the money distributed has come in the form of increased federal education and health-care grants to state governments. This money has helped many state governments to partially offset budget shortfalls. A much smaller portion has been spent on transportation infrastructure projects, the GAO said.

In addition, about a third of the stimulus package consists of tax cuts, such as a payroll tax credit that has already gone into effect.

The White House and some Democratic lawmakers have recently raised the idea of another round of economic-stimulus legislation. House Majority Leader Steny Hoyer (D., Md.) on Tuesday said Washington should be open to the possibility of a second stimulus package to further boost the economy. "I think we need to be open to whether we need additional action," Mr. Hoyer told reporters.